sunkyu

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I'm applying from canada and have been scheduled for interview in a couple of days at a US medical school. The problem is I know only little about US healthcare system. From what I know, the system has been such that only people with job can get a insurcance coverage with their employer paying for the bill. Last year president Bush introduced a reform which promotes individual planning and paying for their own health insurance. Am I getting it right?

Could someone with more knowledge elaborate on Bush's new policy?
All I know is that employers no longer have to pay for their employee's insurance cost but there are many other terms and concepts I don't know such as high-deductible catastrophic insurance (what is deductible and what is catastrophic?) and health saving account.

Please help. I have an interview next tuesday and I have no american friend to sort these out for me.
Thankyou.
 

trinitrotoluene

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EMPLOYER PROVIDED COVERAGE: Many employers offer free or reduced cost health benifits. Generally, employers split the cost of health insurance with their employees. Employees who are married and/or have children can obtain insurance for their whole families. The federal government provides assistance in these situations by giving employers a tax-deduction against their corporate taxes. Money that employers spend on providing health benefits to employees is deducted from taxable income/profits before calculating taxes. Money that employees spend on employer provided health-care is paid for with pre-tax dollars. Therefore, if an employee makes $50,000 in salary and spends $6,000 on health insurance, the employee's taxable income drops to $44,000.

What about same-sex couples? There situation depends on the state they are in and the company they work for. In some states like Massachusetts and Vermont, spouses in same-sex couples can get spousal coverage just like opposite-sex couples can. However, in most states, the company you work for must elect to buy special benefits for spouses in same-sex couples.

There are four major types of private health plans in America. Fee-for-service (FFS) plans allow people to see any doctor they want and pay the full cost of all expenses. Generally, only corporate executives get this type of coverage. (Some companies call it exec-u-care.)

Health Maintenance Organizations (HMO) strike cut-throat deals with a small set of doctors who provide coverage on the cheap. HMOs greatly emphasize preventative care to cut costs as well. They also emphasize the use of generic drugs by forcing users of "brand-name" medications to pay $15-$35 per script filled; that's called a co-payment. HMOs are the cheapest for employers and employees; however, they greatly restrict treatment options (doctor choices, medication choices, etc.). Blue-collar workers often get HMOs.

Prefered Provider Options (PPO) split the difference. They are really much like HMOs; however there are generally more doctors in the network and you can see doctors outside your network if you don't mind paying more. Non-executive, white-collar workers often get PPOs.

Health Savings Accounts (HSA) are a totally different critter. Most health insurance plans (FFS, HMO, PPO) cover both routine and major medical costs. They have high premiums (insurance sticker price--$6,000 to $7,000) and low deductibles (amount you pay before benefits start--generally $500 to $1000). With HSAs, its the other way around. Premiums with HSAs are about $1,500 less, but deductibles are about $2,500. Employers make up the difference by creating special accounts, and putting $2,500 in each employee's account every year. The $2,500 goes in tax-free. Any money you spend on health expenses goes out tax-free. Any money in the account that you don't spend goes stays in your account; you get to keep it! Unfortunately, HSAs fiscally discourage individuals from getting routine care.

The major problem with employer provided insurance is its expense. Even with the tax deduction, health benefits severely cut into corporate profits (reducing corporate health) and employee salaries. Moreover, as costs spiral upward, this puts more pressure on employers and employees.

SELF-EMPLOYED WORKERS: People who own their own businesses or are independent contractors must buy their own insurance. (Independent contractors are paid by another company but are not company employees.) The self-employed can claim a tax credit for health-insurance premiums. Tax credits are applied against the total tax to be paid. For example, if a self-employed person must pay $6,000 in income tax and spend $5,000 on health insurance, then the person's tax bill will only be $1,000. However, if a self-employed person must pay $4,000 in income tax and spend $5,000 on health insurance, then the person pays no tax but does not get a check from the government.

EVERYONE ELSE: If you want private insurance, you must pay full price. You must apply for insurance and can be turned down if you have certain "pre-existing conditions." In an attempt to limit this problem, Congress passed HIPAA (Health Insurance Portability and Accountability Act). HIPAA prohibits discrimination on the basis of "pre-existing conditions" if the potentially insured person has had "credible coverage" for 12 consecutive months. They also passed COBRA that requires employers to offer coverage to downsized employees (released due to slack work conditions); however, downsized employees must pay full price for coverage. Downsized employees are guaranteed COBRA for 18 months; disabled persons and children are guaranteed COBRA for 36 months.

Federal tax law also offers some help. People who buy their own insurance but cannot get a tax credit can claim a deduction if their expenses account for more than 7.5% of their income.
 

trinitrotoluene

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MEDICARE: This program, created by President LB Johnson in the 1960s, provides health coverage to every senior citizen in the United States. Medicare is a FFS plan paid for by a special payroll tax. Each time you get a paycheck from your employer, the government withholds 6.2% of the total amount; however, only the first $90,000 of your yearly salary is taxed. Also, your employer must pay the same amount to the government. Self-employed workers and independent contractors must pay 12.4% of the first $90,000 of total income. Note that this is a payroll tax, therefore, you cannot claim deductions from with this tax. Also note that these taxes also pay for Social Security, the federal pension plan.

Upon turning 65 (or 62 if you are really poor), the government starts paying part of your medical bills. Until recently, Medicare only paid for medical procedures: doctor visits, hospitalization, medical imagery and lab work, etc. Under a law passed in 2003, Medicare now offers a prescription drug benefit. In 2004 and 2005, seniors can sign up for one of many discount plans that reduce the price of drugs. Different plans offer different types of savings. Starting in 2006, the federal government will buy drugs for seniors and resell them at reduced cost. Unfortunately, the government only pays for initial expenses and catastrophic expenses. There is a coverage gap or doughnut hole that will affect many seniors. To cover this and other gaps, some seniors buy supplemental insurance from private companies.

MEDICAID: This FFS program covers poor people. The federal government sets guidelines for providing coverage, but each state government runs their own program after it is approved by federal regulators. The Feds pay about two-thirds of the program; the states pay about one-third. To qualify for traditional Medicaid, you generally must be under the federal poverty line (FPL). (The Department of Health and Human Services sets the federal poverty line, which varies with the number of people and children in a family.) If you are below FPL, you must also be under 19 years-old, over 64 years-old, disabled, pregnant, or have dependent children. Access to insurance or actually having other insurance does not affect eligibility. Although the quality of the insurance is quite poor in comparison to many private plans, it is largely free or low cost.

States are allowed to offer coverage to people who are not eligible for coverage as describe above. States must apply for a federal waver to experiment with such coverage. Tennessee applied for such a waver in 1994 to create TennCare. The idea was to end FFS, and administer Medicaid via HMOs. HMOs would contract with the state, and patients would sign up for the HMO they liked the most. HMOs with more patients get more money from the state, and HMOs that get the best deals from doctors, hospitals, and pharmas keep more of their money. The state would use any savings to provide coverage to more state residents: those who are under FPL and without kids, those above FPL, and those who cannot get coverage because of "pre-existing conditions." At the end of 2004, Tennessee had, “The most expansive state health-care program in the United States.” Unfortunately, ballooning costs and the need to increase spending on education will lead to big cuts in TennCare.

PUBLIC EMPLOYEES: Public employees get coverage just like many private employees get.

VETERANS: Veterans who have been wounded often get good treatment from the Federal government.
 

trinitrotoluene

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Unfortunately, there are over 45 million Americans who have no health insurance at all. Some of these people could obtain insurance through their employer, but turn it down because they feel that they don’t need it (the young for example). However, those who are unemployed, have employers who don’t offer health plans, or offer health plans that are too expensive don’t have any insurance if they qualify for Medicaid. If they get sick, they end up in the emergency room and insured patients pay their bills. If they face major medical work, then they must either take on crushing debt or suffer and die.

Many solutions have been proposed. Here is a sampling. Democrats generally favor all but the last two. Republicans generally favor the last two.

SINGLE PAYER: The Federal government would take over the health care industry and pay all health bills with taxes. This plan is used largely in Europe and Canada. It is highly unlikely that the USFG will adopt a single payer system in the foreseeable future.

CLINTON CARE: President Bill Clinton and his wife Hillary Clinton proposed a complex universal health-care scheme. If you worked for a company, employers would be required to provide a basic (HMO) level of benefits. Small businesses could team up to exact better deals on health goods and services. Businesses would also have to offer higher (PPO and FFS) levels of benefits, but they could require employees pay for them. People who are not employed would get the same deal, but the government would pay for basic coverage for poor people.

EXTEND MEDICAID: The USFG would increase funding for Medicaid to expand coverage. Howard Dean and John Kerry proposed such policies. Under their plans, all children and all adults below FPL would be covered.

BUY-IN PLANS: The government would sell insurance policies to individuals. Dean suggested that adults over FPL could pay 7.5% of their adjusted gross income to obtain benefits. (Adjusted gross income is total income minus exemptions. Singles and married people filing separately get an automatic $3,000 exemption. Couples, single parents, and widowed singles get an automatic $6,000 exemption. You also get a $3,000 for every dependent that you can claim. There are other exemptions as well.) Kerry proposed allowing individuals to buy in the Federal Employees Plan. These plans would lower the cost of insurance for many low-income Americans and allow patients with “pre-existing conditions” to get coverage.

ENDING THE USE OF MEDICAID AS CORPERATE WELFARE: Many companies either don’t offer insurance or offer insurance at very high prices to force employees onto Medicaid. Under this plan, any company that engages in such practices that is also in an industry that generally offers insurance to employees would be required to also offer benefits or pay a special tax to support Medicaid programs. (Some companies like Wal-Mart do this to keep prices artificially low. The state provides health coverage to their workers so that they will be healthy to work. Although Wal-Mart’s prices stay low, the state is stuck with offering fewer services or increasing taxes.)

THE VANITY TAX: Most states do not charge a sales tax on health goods and services—even for purely elective and non-medically necessary procedures. The vanity tax ends that practice, and new revenues would pay for Medicaid programs.

EXPANDED TAX CREDITS: This would allow individuals, self-employed or not, to claim a tax credit for money spent on health insurance. Dick Gephardt advocated this plan in 2003-04.

MALPRACTICE LIABILITY REFORM: Medical costs are rising partially because malpractice insurance premiums in the US are so high. Many (especially Republicans) believe limiting the number and scope of “frivolous lawsuits” will reduce costs. The Democrats generally advocate a more moderate approach: special medical courts with expert juries, penalizing lawyers who forward too many cases devoid of merit, policing and revoking the licensees of reckless doctors, and not allowing punitive damages except in extreme cases. The Republicans favor adding a universal 1/4 million dollar cap on pain and suffering damages.

HEALTH SAVINGS ACCOUNTS: They would be made more widely available. Current law limits the number that can be created.

SMALL BUSINESS HEALTH ALLIANCES: Small businesses could set up these alliances to increase their bargaining power with insurance companies.
 

trinitrotoluene

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I did not write all of this for the OP. I wrote it because I am a political advocate who is very interested in universal health care reform. I have been meaning to do this for a while, but I would like others to double check my work. If there is anything wrong or missing in all of that prattle, please PM me.
 

mdsadler

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Wow TNT,these posts impressive.
 

Code Brown

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Attending Physician
sunkyu said:
I'm applying from canada and have been scheduled for interview in a couple of days at a US medical school. The problem is I know only little about US healthcare system. From what I know, the system has been such that only people with job can get a insurcance coverage with their employer paying for the bill. Last year president Bush introduced a reform which promotes individual planning and paying for their own health insurance. Am I getting it right?

Could someone with more knowledge elaborate on Bush's new policy?
All I know is that employers no longer have to pay for their employee's insurance cost but there are many other terms and concepts I don't know such as high-deductible catastrophic insurance (what is deductible and what is catastrophic?) and health saving account.

Please help. I have an interview next tuesday and I have no american friend to sort these out for me.
Thankyou.
Check out www.publicagenda.org for more info on the pertinent issues...
 

Sancho

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Great information on here, however don't get any impression that you will have to know much of this for your interviews. I stressed out about this before i-views last year, what a waste of time. The only thing you have to worry about is having a good time and not coming across as a dick, a freak, or something similar-seriously, that's it. Anyway, good luck to the OP, we've got some of you maple leaves in our class, good people y'all are.